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DOJ Investigate Investor for Insider Trading Over Office Depot-Staples Merger Back in 2021.

Toner News Mobile › Forums › Toner News Main Forums › DOJ Investigate Investor for Insider Trading Over Office Depot-Staples Merger Back in 2021.

Tonernews.com, February 10, 2024. USA
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    jim
    Keymaster

    DOJ Investigate Investor for Insider Trading
    Over Office Depot-Staples Merger Back in 2021.
    Influencer’s husband allegedly traded secrets over Miami lunch. Brandon Charnas is a real estate investor and the husband of Arielle Charnas, a popular fashion influencer with over 1.3 million followers on Instagram. He is also one of the ten people who are being investigated by the federal authorities for allegedly using insider information to profit from a potential merger between Office Depot and Staples, two of the largest office supply retailers in the U.S.

    Office Depot Rejects Staples' Acquisition Offer, Again | Industrial Distribution

    The case dates to late December 2020, when Charnas and his associates learned from a confidential source that Staples was planning to make a bid for Office Depot. The source was a former employee of a consulting firm that was hired by Staples to evaluate the merger. The source shared the information with his friend, who then passed it along to Charnas and others.

    Acting on this tip, Charnas and his group bought shares and options of Office Depot, hoping to cash in on the expected rise in the stock price once the merger was announced. They were right: in January 2021, Staples publicly offered to buy Office Depot for $2.1 billion, and Office Depot’s stock price jumped by 19%. Charnas and his associates quickly sold their positions and made a total of $1.7 million in profits, with Charnas earning $385,000.

    However, their scheme did not go unnoticed by the regulators. The Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) launched investigations into the matter, suspecting that Charnas and his group violated the federal securities laws by trading on material, non-public information. The SEC subpoenaed Charnas for his text messages and other documents related to the trades, but Charnas refused to cooperate and challenged the subpoena in court. He argued that the SEC had no jurisdiction over him, since he was not a registered broker-dealer or investment adviser, and that the subpoena was overly broad and burdensome. The DOJ also opened a criminal investigation into the matter, which is still in its early stages and may or may not result in charges.

    The case of Charnas and his group is one of the many examples of how insider trading can occur in the modern era, where information can be easily shared and accessed through social media and other platforms. It also shows how the regulators are cracking down on such illegal activities, using sophisticated tools and techniques to detect and deter them. The outcome of the case could have significant implications for the future of insider trading enforcement, as well as for the reputation and career of Charnas and his wife, who are both prominent figures in the fashion and lifestyle industry.

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    February 10, 2024 at 3:45 PM
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